The Current Economy: What Nonprofits Need to Know
A Note Before We Begin
I know how exhausting it is to read headlines about the economy, funding cuts, and donor burnout—especially when you're already doing the work of ten people on a shoestring budget. The last thing I want to do is add to your stress. But I also believe that being informed is empowering, and with thoughtful planning, your nonprofit can not only survive the current economy—but build real financial stability for the long haul.
The first few months of this administration have shown us that operating a nonprofit is going to be increasingly challenging, especially for grassroots and community-centered organizations. But I don’t believe in doom-and-gloom thinking—I believe in strategy, preparation, and action.
That’s why I wrote this blog. I want to help you understand what’s happening, how it might affect your organization, and most importantly, what you can do right now to protect your mission and plan for the future. You’ll find practical action steps and helpful links to related resources woven throughout, so you can begin building a stronger financial foundation—starting today.
Let’s dig in—together.
🚨 The economic outlook has shifted—and nonprofits can’t afford to ignore it. From inflation and delayed funding cycles to rising program costs and donor fatigue, today’s economic climate is challenging even the most well-run organizations.
Whether your nonprofit is large or grassroots, understanding the financial landscape—and adapting to it—is critical for long-term sustainability. In this blog, we’re breaking down what’s happening, how it affects your organization, and what you can do right now to protect your mission.
🔴 Inflation Is Quietly Gutting Your Nonprofit’s Budget
The Consumer Price Index (CPI) rose 3.1% year over year as of January 2025, and while that’s a slight improvement from previous years, costs remain significantly higher than pre-pandemic levels.
Rent, insurance, food, materials, travel—nearly every line item in your budget is under pressure. For nonprofits with fixed income (like multiyear grants or fee-for-service contracts), this means you're operating on dollars that now buy less.
📌 Action Step: Build room in your future budgets for inflation adjustments and create a savings buffer to absorb unexpected cost increases.
👉 Related Resource: How Much Should Your Nonprofit Be Saving
🟡 Funding Delays Are Becoming the Norm
Federal, state, and even private funders are taking longer to disburse grants and reimbursements—sometimes by months. This lag time can stall programs, delay payroll, and create panic in your finance office.
A report from the National Council of Nonprofits in 2024 showed that 42% of nonprofits experienced delayed grant disbursement that disrupted program delivery.
📌 Action Step: Start a dedicated savings account so your organization isn’t dependent on external disbursement timelines to stay operational.
👉 Related Resource: Why Your Nonprofit Needs a Savings Account
🔴 Donor Giving Patterns Are Changing
While philanthropy remains strong in some sectors, individual donor giving is becoming more sporadic. As inflation impacts personal finances, many donors are pulling back on monthly giving or skipping one-time donations altogether.
In 2023, Giving USA reported the largest drop in individual donations in over a decade, especially among small to mid-level donors.
📌 Action Step: Use donor stewardship strategies to retain existing supporters, but don’t rely on donations alone—build a reserve fund to smooth out the ups and downs.
🟡 Nonprofit Burnout Is Increasing, and It's Financial Too
It’s not just your staff feeling the strain—it’s your budget. Stretching too few dollars across too many needs leads to underpaid staff, high turnover, and unsustainable programming.
When there’s no margin, every decision feels urgent. A savings account doesn’t just support your operations—it supports your people and your organizational culture.
📌 Action Step: Treat savings not as “extra,” but as a core component of sustainability and staff wellbeing.
👉 Related Resource: Book a team training with Be Restored, Inc. to learn the warning signs of burnout and tangible steps you and your team can take together to prevent burnout.
🟢 The Good News? You Can Start Saving Today.
You don’t need a six-figure surplus to start building financial resilience. Even $50/month into a dedicated savings account creates a safety net over time. Plus, high-yield savings accounts are more accessible than ever, and many have no minimums or fees.
📌 Action Step: Set a goal, automate a monthly transfer, and treat it like any other operating cost.
👉 Related Resource: How to Pick a Nonprofit Savings Account
Final Thoughts
This economy is forcing nonprofits to get sharper, more strategic, and more resilient. Having a savings account is no longer a “nice to have”—it’s a critical tool for survival and sustainability.
🔴 Don’t wait for the next budget shortfall or funding delay.
🟡 Don’t rely on hope alone to fund your mission.
🟢 Start building your safety net now—because your work matters too much to run on empty.
💬 Have questions about how to start saving or how much is realistic for your organization? Let’s keep the conversation going—drop a comment below!
Want expert guidance on improving your grant strategy? At Beckie Irvin Consulting and Research, LLC, we help grassroots nonprofits develop stronger grant proposals, research funding opportunities, and build sustainable fundraising plans. Book a consultation today, and let’s get your organization the funding it deserves!
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